EU launches €10 billion fund for low carbon technologies

EU launches €10 billion fund for low carbon technologies

An investment programme worth over €10 billion has been launched by the EU to fund the development of low-carbon technologies in several sectors.

The Innovation Fund will focus on highly innovative technologies and big flagship projects with European value added that can bring on significant emission reductions, cross-cutting projects on innovative low-carbon solutions, and also small-scale projects. It aims to support project promoters by sharing the risk with project promoters at the demonstration phase highly innovative projects.

The  fund will be financed by the EU Emissions Trading System (EU ETS) and will support up to 60% of the additional capital and operational costs that are linked to innovation.

In particular the Fund will priorities investing in highly innovative technologies in energy intensive industries, in carbon capture, storage and use, in the renewable energy sector and in energy storage.

The European Commission wants to ensure that Europe continues to be at the top of the league as regards new high-value patents for clean energy technologies. This leadership provides a global competitive advantage, allowing Europe to harvest first mover benefits by increasing exports of European sustainable products and sustainable technology and business models.

The Commission aims to launch the first call for proposals in 2020, followed by regular calls until 2030.

Strategic programme

The Fund is part of the EU’s strategic long-term vision for a competitive and climate neutral economy by 2050 launched in November 2018.

The strategy aims at achieving climate neutrality while preserving the competitiveness of its industries by investing into realistic technological solutions. This transition also requires further scaling-up of technological innovations in energy, buildings, transport, industry and agriculture sectors.

The Innovation Fund aims to create the right financial incentives for companies and public authorities to invest now in the next generation of low-carbon technologies and to give EU companies a first-mover advantage to become global technology leaders.

The Fund will pool together resources amounting to around €10 billion, depending on the carbon price. At least 450 million allowances from the EU Emissions Trading System (EU ETS) Directive will be sold on the carbon market in the period 2020-2030. The revenues of these sales depend on the carbon price, which is currently around EUR 20.

The programme builds on the experience from the NER300 programme, the current EU programme to support the demonstration of carbon capture and storage and renewable energy technologies. It expands its scope to also explicitly cover energy storage and energy intensive industries and is better tailored to promote innovation through an improved and simplified governance.

It will offer grants to cover up to 60% of the additional capital and operational costs linked to innovation for the selected projects, disbursing the money in a flexible way based on the needs of individual projects.

The Fund will also support cross-cutting projects on innovative low-carbon solutions that lead to emission reductions in multiple sectors, for example through industrial symbiosis or business model innovation.

Projects will be selected based on:

  • Effectiveness of greenhouse gas emissions avoidance
  • Degree of innovation
  • Project viability and maturity
  • Scalability
  • Cost efficiency (cost per unit of performance)

The Fund is also open to small-scale projects with total capital costs under €7.5 million which can benefit from simplified application and selection procedures.

The Innovation Fund aims to create the right financial incentives for companies and public authorities to invest now in the next generation of low-carbon technologies and to give EU companies a first-mover advantage to become global technology leaders.

Further information

 

 

June 11, 2019
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